SAN JOSE, Calif., June 5 -- Competition between different types of laser media and growing rivalry from nonlaser technologies are compelling laser system manufacturers across the world to diversify their product and technology base, according to a market analysis by Frost & Sullivan.
This industry-wide reconsolidation is likely to continue to focus on the acquisition of companies that offer broader product lines, and there will be increasing emphasis on developing next-generation systems that are essential for furthering market expansion, according to the report, World Laser System Markets, which reveals that this market generated revenues worth $4.21 billion in 2002 and is likely to reach $6.42 billion in 2009.
"Repositioning for growth is being attempted through three different routes," said Frost & Sullivan Industry Analyst Sathyajit Rao. "First, by increasing focus on research and development; second, through acquisition of companies to plug gaps in the existing value chain; and third, through a focus on strategic alliances."
Manufacturers with a wide product portfolio are in a position to generate revenues from different industry applications. Certain end-user industries such as semiconductors and machine tools will continue to see demand fluctuations following a cyclic pattern in their industry.
"When selective industries tend to slip into negative growth, it pays to have knowledge of the present competitive landscape along with a broad focus on applications and products, which is crucial for future growth," said Rao.
There is also a strong need for products with a higher price-performance ratio, which is compelling manufacturers to pay more attention to research and development, he said. "Outsourcing noncritical activities will enable manufacturers to specialize in key product technologies and reduce manufacturing costs."
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